LONDON – In an interview with the Press Association, TUI’s Chairman Klaus Mangold ruled out any form of merger and acquisition of the group, following the waves of talks between other carriers such as IAG and Norwegian.
Mangold said to the press that the company is at a stage where it is unlikely that such deals could take place due to the airline undergoing an overhaul of its fleet, as well as the development of potential regional flights around Europe.
“We have around about 170 aircraft. We have done a lot to restructure this quite successfully, so, for the time being, we don’t have any plans for acquisitions or mergers,” he explained.
“We are certainly looking carefully (at) what is going on in the market, but for the time being we would not like to have an active role if it comes to acquisitions,” he added.
No to IAG
Relating to the large waves of mergers and acquisitions, came the potential deal with Norwegian for IAG taking over the majority of the carrier after building up a 4.61% stake.
Although such offers have been made, Norwegian has already rejected two offers from IAG claiming that these were “undervaluing” the airline.
However, IAG doesn’t seem to be giving up as they said that they are “considering its options in relation to Norwegian”.
These mergers and acquisitions taking place are at a result of chunks of the sector collapsing.
A void to fill in Europe
The demise of carriers such as Air Berlin and Monarch have ultimately resulted in competitors flocking for the remaining assets and landing slots.
TUI, however, has said that although this is happening, they are not worried about the competitiveness of their carrier.
Talking about the competition element, the airline’s chief admitted that, “We have to look carefully in which ways we can improve our own competitiveness, and this is what we were are doing, and I believe that – as I just mentioned – we have made major steps forward so TUI have no reason to complain and be nervous about this.”
The group currently has over 70 Boeing aircraft on order, with deliveries already underway.
Mangold also mentioned that the new aircraft and creating a younger brand image is looking very successful for them at the moment, given the fact that “We see that more and more young people are coming back to tour operators and because they would like to have personal advice for certain destinations,” he said.
The CEO has therefore placed a strong focus on young people “without neglecting the older generations.”
This is also down to younger customers demanding the same service to that of their more senior clients in the business.
TUI seems to be on a path of remaining strong and will not have to result in creating deals with other competitors.
It is interesting how Mangold has had to mention about the mergers and acquisitions taking place in the sector because the group is in a strong state already across Europe and would not need to put themselves on sale.
However, mergers and acquisitions must be something that has been on the CEO’s mind, because there has been no indication of carriers showing interest in the group.
And more importantly, the group’s financials are not in a position where an acquisition would benefit them.
They are roundly sized and would have nothing else to gain but potentially damage what they have produced up to now.